It requires you to set up the operation from scratch in every city--and it probably only works in cities.

There is a ton of regulatory risk.

Right now the market is pretty much only high net worth individuals.

Oh... You only invest in scalable businesses? Sorry, I didn't realize. I'll keep that in mind for next time.

Congrats, you passed on Uber.

And you know what--if "scalability" was an important criteria for you, and you wanted businesses where all you had to do was write a bit of code and people started paying you software margins all along the way, you would have rightfully passed. You would have also passed on Fitbit, Nest, Tesla, SpaceX, Blue Apron, Makerbot and a whole host of other things.

At least you would have done Slack.

Yet, as cash friendly as Slack could be--where it could easily have Kickstarter or Craigslist-like cashflow to cap table like ratios, it is still raising hundreds of millions of dollars. So does it really matter if it's being spent on developers or factories. Dollars are still dollars. Look how much Twitter and Facebook raised before exit.

Seems to me that every deal is a tradeoff. Retail stores may not have the same margin or viral growth, but what they spend to build a store is what they don't spend in customer acquisition dollars that Blue Apron spends. What Canary spends to build a product they make back in a clear path to revenue that Pinterest may or may not ever see. They certainly don't make as much per customer as Canary does.

To me, I care about whether something is unit profitable, whether the market is big enough, and whether your business gets easier or harder to run the more business you do. Even in retail, managing more stores is hard, but you also have enough revenues to justify a layer of management expertise that makes your business easier to run. You've got more customer awareness as well. Marketing the 10th Soul Cycle location is easier than marketing the first.